Biotech Values

[mouton29]

<<Yes, but unlike a flood, the outcome of your calls getting exercised is not a total wipe-out loss>>

That's true and Dew is focusing on the potential for lost profit. But the other way of looking at it is that when you write a covered call, you have given up the upside in exchange for a premium but have retained the downside. Looked at that way, the analogy to flood insurance is not so far off the mark -- in both cases you get a premium and take the risk of loss.